Correlation Between SLR Investment and Top Frontier

Can any of the company-specific risk be diversified away by investing in both SLR Investment and Top Frontier at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SLR Investment and Top Frontier into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SLR Investment Corp and Top Frontier Investment, you can compare the effects of market volatilities on SLR Investment and Top Frontier and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SLR Investment with a short position of Top Frontier. Check out your portfolio center. Please also check ongoing floating volatility patterns of SLR Investment and Top Frontier.

Diversification Opportunities for SLR Investment and Top Frontier

-0.85

Correlation Coefficient

SLR Investment  Top Frontier

Pay attention - limited upside

The 3 months correlation between SLR and Top is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding SLR Investment Corp and Top Frontier Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Top Frontier Investment and SLR Investment is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SLR Investment Corp are associated (or correlated) with Top Frontier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Top Frontier Investment has no effect on the direction of SLR Investment i.e., SLR Investment and Top Frontier go up and down completely randomly.

Pair Corralation between SLR Investment and Top Frontier

Given the investment horizon of 90 days SLR Investment Corp is expected to generate 0.17 times more return on investment than Top Frontier. However, SLR Investment Corp is 6.02 times less risky than Top Frontier. It trades about 0.14 of its potential returns per unit of risk. Top Frontier Investment is currently generating about -0.13 per unit of risk. If you would invest  1,563  in SLR Investment Corp on December 17, 2024 and sell it today you would earn a total of  122.00  from holding SLR Investment Corp or generate 7.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

SLR Investment Corp  vs.  Top Frontier Investment

SLR Investment Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SLR Investment Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, SLR Investment may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Top Frontier Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Top Frontier Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with SLR Investment and Top Frontier

The main advantage of trading using opposite SLR Investment and Top Frontier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SLR Investment position performs unexpectedly, Top Frontier can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Top Frontier will offset losses from the drop in Top Frontier's long position.

The idea behind SLR Investment Corp and Top Frontier Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Content Syndication module to quickly integrate customizable finance content to your own investment portal.